What is more important of course is to understand what drives individuals commitment or engagement levels. We know that understanding how what you do on a daily basis matters to the company and your customers is a key factor. What if you could get instant feedback on how you’re doing. I mean instant like in sports when people applaud or buh every move.

I just got back from a business trip to China and at the new airport in Beijing when going through customs you get the opportunity to provide instant feedback to the passport officer on duty. Talk about taking this seriously empowering the customer to provide instant feedback and the company in this case the government of China to take instant action to resolve any immediate issues as well constantly learn how to improve and become better.

On a side note if you’ve been through Heathrow lately I’m sure you understand and sympathize with me when I say that we all would want a way to provide feedback and help them improve as well. Happy travels!

I wanted to get his opinion on all things Engagement – What is it?  Why don’t companies understand it? What can they do about it?  He offered some great insight, even better sound bites, and a compelling argument as to why this is THE business challenge the will separate the winners from the losers during the economic recovery.

Seven questions and answers that will be sure to lead your organization to Engagement bliss, or simply scare you to death.   One thing is for sure, if your company wants better execution, then your organization better address the engagement issue now or it will address your organization later.

Take a look and let us know what you think.  I’ll make sure Brad responds to any questions that you may have.

Many books have been written about the topic of Employee Engagement.  What makes this one different?

(Answer) First, most books on Engagement tackle a piece of the subject, but do not take a holistic view providing the reader with a less than realistic view of what engagement really is.  It would be the equivalent of educating someone on small business loans and giving them the impression that they understand everything there is to know about the economy.  Second, this is not an HR book.  This is a business book for managers, leaders, and executives who want to grow their organization regardless of their function. 

Why do you think so many companies still have a problem grasping this concept?

(Answer) The entire economy has been turned upside down, the employer-employee relationship has been turned on its head, a generational shift is occurring in the workplace, technology has dramatically altered how we communicate and perceive one another, yet most of our tools, structures and research we use as well as the habits we live by come from the 80’s and 90’s.  We have yet to catch up to our current reality.  Some don’t recognize the changes, others hope things return to what they coin “normal”, and many that recognize and grasp our new reality struggle with how to act on it.

World at Work recently released a study stating that Engagement has decreased 9% worldwide and 20+% among high-performers.   Did this surprise you?   What do you think the implications are for companies trying to navigate what appears to be a slow moving economic recovery?

(Answer) No it does not surprise me about this study.  The implications are simple and straightforward.  Those that focus on engagement now will recover faster and stronger than those that do not.  Many organizations are still healthy because they never lost sight of engagement during this difficult period.  When the economy does recover, the floodgates will open at certain organizations and they will lose their intellectual capital.  But that is not the scariest part.  The scariest aspect is that that there are companies right now that do not realize the bad shape they are in with their business. They blame their ills on the economy.   My question for those organizations is…You may have the bodies, but how many souls have left the building?  Without spirit they don’t have a business. 

What do you consider the top three reasons for decreased engagement?

(Answer) Fear, Control, and Self Interest starting with senior leadership then cascading down from there.  The ingredients that create strong, productive relationships are also the same ingredients that create healthy, dynamic organizations – Trust, Transparency, Authenticity, Ownership (accountability), Creativity and Resourcefulness.  Unfortunately difficult circumstances cause many organizations, specifically senior leadership, to neglect what is important.  During difficult economic times people tend to act or make decisions based on fear, concerns, or anxiety.  All of us have fears, concerns, and anxiety but if we are able to admit when we are falling prey to them and work through those issues with others then we are able to make healthier decisions.  When stress and fear take over we look at the world in exclusive terms and in limiting ways.  We become focused on mitigating risk and lose sight of opportunity.  We decide to put in a number of controls to create predictability and political jockeying goes into overdrive because everyone wants to keep their job.  These types of behaviors not only spread and change the culture of an organization, but they hamstring the very people who can help us survive these challenges and come out of the other end.  Stress and fear can either be our jailor or our counselor.  It is our choice.  Too many leadership teams during downturns like this one choose, consciously or unconsciously, the jailor and then rationalize it to make themselves feel comfortable.

Many CEO’s still view Engagement as Soft and HR-ish.   Assuming one of them gave you 30 seconds to convince him/her that this is important, what would you say?

(Answer) First of all I would love to have more CEO’s give me 30 seconds.  Any takers?  More importantly, I would like to see a CEO convince me that it is not important.  But since you are asking the questions, here it goes…I would ask them “What factor(s) is most paramount to their success? “  Is the answer is product innovation, sales, service. My next question is going to be “How do your people impact service, sales, product innovation?” Then I would ask them “Why it is acceptable to only 11-24% of their employees proactively helping the organization toward that goal?”  Last I would ask them “What do they think the impact is?”  Seriously, we would not settle for a manufacturing plant at 70% capacity, so why would we settle with our people.   We shouldn’t. We should invest in them.  

Can you share a success story from a company that has made significant improvements in Engagement and the business impact of doing so?

(Answer) We worked with a high tech firm.  They were using a home grown survey that had too many questions, was not tied to research, and was not adding any value.  The survey was seen mainly as an HR activity.  They decided to make a change and they went with our survey the Engagement Index.  The first year that we worked with them the feedback illustrated very low levels of Engagement.  We were very clear with them about which issues were needed to be resolved in order to get an ROI from this process.  We also helped them with follow up, focus groups, and action planning.  Leadership was seen as a large portion of the issue.  There was a real lack of trust in their senior leadership.  First came a bit of shock, then regret, and then the excuses.  We helped them process the feedback and they came to the realization that not only did the organization have to make changes, but their leadership had to as well.  We have worked with them for four years now and their engagement levels have significantly improved.  There leadership is now trusted, and people believe in the mission and direction of the company.  Many employees shifted from being angry, complaining, sabotage – to pulling for the company even during difficult times.  Financials had been going south, but one year into our efforts they were able to create an 11M positive shift in profit and the engagement numbers and financial numbers have continued to go in the right direction.  They have taken the shackles off of their employee’s hands, allowed them to get back to work, and work passionately together along the way.  

Shameless Plug Time – Say anything you want here to convince readers as to why they should purchase this book.

(Answer) This is a book about business, but more importantly, it is a book about life.  The book will help you improve your relationships, team, division, organization, or strengthen customer relationships.  Any professional, manager, or executive would benefit from this read, but don’t take my word for it.  Here is what others have said:

“This will be the definitive book on employee engagement for years to come.”

“I know this sounds crazy, but this book has more to do with navigating life than improving employee loyalty, etc. I was surprised at how much I gleaned from this “business” book.”

“If you read one book on Engagement, make it this one!”

“Thoughtful. Brilliant. A genie in a bottle!”

“It will give you insight into the language and concerns of the decision-makers.”

Lars, our founder and CEO, and I are working on our book Return on Execution©. You will find posts from the research and findings that we’ll share in the forthcoming book right here on the Business Execution blog. After all driving execution is what explains the financial performance of your company. Execution creates sustained competitive advantage. With an average of 70% of your operating expenditure comprised of labor (for not taking contractors into account) there is no bigger expense post to optimize if you want to drive better execution. It’s not a matter of what but rather who drives the execution of your strategy. To learn more about this exciting book visit this Return on Execution(c) link to read the short version of it.

You’ll see posts from the SF Research team as well as guest posts from our select thought leaders on the topic of driving execution. Keith will share insights from working with our customers around the world in how they increase their ability to execute both here and through Twitter so sign up for that too. We welcome your active input and feedback. Let’s go drive some better execution.

What do the greatest companies all have in common?  You got it — the ability to focus their organization on strategy execution by ensuring that each individual is working (i.e., executing) on goals that matter to the organization.  What type of goals “matter?”  Put simply, only the ones that have a direct line back to the Strategy sitting in a binder on the CEO’s bookshelf.

We’re just researching what impact we have on our customer’s ability to communicate strategy and execute new directions faster. The early results are very intriguing and positive – and we promise to share them when we finalize our research.   The timing is also significant as the economy has forced companies to be agile and demands that companies be able to shift their strategy (and subsequent execution) at a much more rapid pace than in a bull market.

The thing that struck me when doing some desktop research was that even though we know that 85% of performance is due to execution, the amount of content available is unbelievably skewed towards strategy — a simple web search on “Business Strategy” returns 3X more hits than “Business Execution”  (80M hits vs. 24M hits).   The term strategy execution returns only 3.5M hits.

The good news is that the “worm is turning.”   Execution is the topic du jour – maybe it’s the economy, maybe it’s just the natural evolution of business.   Regardless, you can put us squarely on the “Business Execution” team, and we’re looking forward to sharing our results soon.

After all, Execution is the name of the game to drive financial results

I have a job that most people would find either very interesting or very boring.  I’ll let you decide which, but essentially my job is to help people quantify the financial benefits of Optimizing their Investment in their people.   Which people?  Their employees, human capital, talent, etc…   It’s a hot topic at the moment, and certainly the economy has increased the importance of making “smart” people decisions.

For the most part, your average company invests the vast majority of their dollars in people, process, and technology.    Out of those three, People are (typically) by far the average company’s biggest expense.  Research has actually shown that 70% of most company’s operating cost is People related.     So I’m here to talk about optimizing your people investment right?  Not exactly.   Today, I’m writing about the “other P” – Process.  Or to be more exact, your “People Processes.”  Confused yet?  Keep reading…

First of all, people and process are linked.  The definition of Process in a business context is “a method or system for achieving a commercial result.”   Put simply, it’s a method or system that your people execute on to drive commerce  – i.e., goods, services, cash, revenues, margin, etc…   If you have inefficient processes, then you’re hindering your company’s (People) ability to execute and drive commerce.    When I’m speaking with executives about the business impact of “Workforce Optimization” many of their eyes start to glaze over when I discuss the value to the organization of creating more efficient people processes for their Front-Line Managers and HR staff to execute on.     The CFO or COO will tell me that those are “soft” benefits and they aren’t interested.    Technically, they’re right – if a process improvement doesn’t allow you to reduce or re-allocate resources, then it is indeed a “soft” benefit.  However, the line between “soft” and “hard” benefits is blurry at best and I would argue that you can’t optimize the commercial result (hard benefit) without first optimizing the method or system (soft benefit).

The fact of the matter is that if we were talking about this in a manufacturing environment then the same COO and CFO would likely have less of a problem with the line between hard and soft.  If I was telling them that if they improve these inputs (process), then they would increase production by 100 widgets per hour (Output or Commercial Result), then they’d likely get our their checkbook and want to know how soon it can be implemented.    Unfortunately, many times people aren’t as willing to make the direct connection with their “People Processes.”    People are variable – some work harder than others, some are smarter, they have bad days, their favorite teams lose the Super Bowl,  their Mother-In-Law just moved in, and the kid gets sick – it’s certainly not as cut and dry as “Input In” and “Widgets Out.”     The problem is that they make up the most significant portion of your Operating Cost so not fully optimizing that investment is just simply Bad Business.    If you’re an executive reading this here are a few ways to determine how optimized your people investment really is:

· What % of your company can tell you the Organizations Strategic Goals?   Go to the Water Cooler and ask a few people.   Just for fun, also ask them when is the next company holiday – they’ll probably all know the answer to that question.

· Are you measuring top to bottom performance based on those Strategic Goals?   By the way, that may be hard to do if the people in your organization don’t know the goals (see question #1).

· Do you know who your top performers are across the entire organization?    Do you reward them differently for their contribution?

I could go on and on, but the answers to those three questions are a good litmus test for understanding whether your company’s largest investment is being managed wisely.    If it’s not, then you might want to consider investing in a better method to drive commercial result.

In parting, I like to point your attention to the “mother of all processes” – the US Tax Code.   Based on our earlier discussion, the Tax Code in and of itself is merely a process, so improving it would only yield “soft” benefits right?   Forbes Magazine has a blurb discussing the complexity of the process.    In 2008, 500 changes were made to the US Tax code.  The “process” changes to the tune of nearly 1000 words/day being added.    Nowhere is the blurry line between hard and soft benefits more apparent.  The process now consumes 7.6 Billion hours of American’s time per year – the equivalent to 3.6 million jobs.     What’s the result, output, or commercial result?    Well, three of the President’s cabinet appointees have had “tax compliance” issues due to the complexity of the method/system/process.   (By the way, it’s not a political blog, so I’m just giving the benefit of the doubt).  If you’re a business, then you employ teams of people just to navigate through the complexity.   If you’re a regular Joe Q. Public, then you spends hours of your own time and money in order to achieve the optimal commercial result.  Sound familiar?

Maybe process does matter after all…

]]> http://www.successfactors.com/blogs/business-execution/why-process-matter/feed/ 0 http://www.successfactors.com/blogs/business-execution/comfortably-numb-2/ http://www.successfactors.com/blogs/business-execution/comfortably-numb-2/#comments Thu, 08 Jan 2009 22:36:21 +0000 Erik Berggren http://www.successfactors.com/blogs/workforce-performance/?p=321 best songs ever by Pink Floyd when Roger Waters was still with the band it should have little to do with how a business or for that sake the biggest administration in the world is run.…]]> Though being one of the best songs ever by Pink Floyd when Roger Waters was still with the band it should have little to do with how a business or for that sake the biggest administration in the world is run.

I don’t know if we should talk about a new world order but the current situation is unprecedented and our new President Obama is focused on changing how America is run to avoid a longer and deeper recession than necessary. Targeted spending in strategic areas married with a new modus operandi for how the business is run is his recipe. That is not a small task. What I think is most interesting about this whole new deal is not just the magnitude of spending that is being proposed but the measures on how to change how America is run.

Obama being quoted in USA today, “Our problem is not just a deficit of dollars. It’s a deficit of accountability, a deficit of trust,” Obama said at a brief news conference. “We can no longer afford to sustain the old ways when we know there are new and more efficient ways of getting the job done . . . Even in good times, Washington can’t afford to continue these bad practices. In bad times, it’s absolutely imperative that Washington stop them,” Obama said.

“So change and reform can’t just be election-year slogans. They must become fundamental principles of government . . . The appointment I am making today is one of my most important.”

Obama appointed the United States’ first Chief Performance Officer. That’s right a CPO. Nancy Killefer will work with the different cabinet departments to drive alignment and execution from all the people serving there. Yes government is people business. People not organizations perform.

Hiding is no recipe for changing and driving America no more. We can’t afford to be comfortably numb in this situation. We need leadership, accountability and action.

Is this appointment the start of a trend for other organizations? Will more organizations increase the focus on driving performance to thrive in these times? Will more organizations appoint CPO’s?

It is just great to see the American government start acting like a business focusing on driving performance. The worlds’ greatest companies all have a tremendous focus on aligned execution. The greatest companies have transparent systems where they can measure and thus manage the most strategic assets they have – the performance of their people. Full visibility requires real trustworthy data that these companies get from their talent management tools. Imagine the President having full visibility into how people are aligned on Americas goal with full transparency into what works and not all the way down to individuals performing or not…

Good luck Nancy Killefer!

SuccessFactors Research recently surveyed 227 companies in the UK and Ireland and found that 60% of the respondents listed staff morale as the number one effect of the crashing economy, followed closely by goal alignment and achievement, which was selected by 31% of the respondents. What does this mean for business? I am sure you have noticed the title of this blog, Carrying Rocks or Building a Castle. People who are not aligned with their organization are merely carrying rocks, doing work without building the castle. Companies simply cannot afford to let their people do unproductive work, whether in a good or bad economy. Workers with low morale who are not engaged may never pick up the rock at all.

The cost of an unmotivated workforce is quite substantial. SuccessFactors Research has always maintained that a company’s ability to execute is based on three factors: motivation, talent, and organizational ability (tools, etc.) In fact, we consider these three factors to be multiplicative, so low motivation, or low engagement, directly and negatively impacts the other two factors across the company. Companies can tackle both challenges highlighted in our survey, low morale and goal alignment, with an effective goal management strategy.

Having a direct line of sight between one’s individual contribution and the company’s goals is one major driver of engagement. Goal management can help provide that line of sight, linking and cascading goals so that the worker always has a context for his or her actions.

When optimizing the workforce, potentially laying off staff, and adjusting to the changing business environment, you can’t afford to let low morale effect your organisation’s ability to execute. Ensure that goals are clearly set and managed effectively, and build strong teams committed to building the castle.

1. Simplicity
   This is a core value of the company, to make it as easy as possible for our users to do their jobs – reduce clutter and complexity wherever possible.
2. Efficiency
   Provide users with the most efficient means possible for them to accomplish their goals – in general, the fewer delays, page views, and mouse-clicks, the better.
3. Quality and robustness
   Because of the importance and sensitivity of our customer’s data, as well as the uptime (availability) of our product, our product must be precise, solid, well functioning, secure, and unbreakable.
4. Clear, direct, and honest communication
   We follow guidelines for communications that also happen to be good for user interfaces! Instructions and messages should never confuse the user.
5. Add value at every step
   We demand of ourselves to add “value” at every step. Every feature of our product should have some strategic reasoning behind it. If it doesn’t add value for our users, we must question why it’s there. To add strategic value, we strive for:      
   1. Relevance
      Our design must be appropriate and usable by the intended audience, and reflect the user’s world. We should avoid jargon and metaphors that don’t fit how users think of our product.
   2. Visibility
      We believe organizations work best when there is direct line of sight – people can see what they should be doing. The same holds true for user experience. If users can see and understand the capabilities of the system, they will be more successful in accomplishing their tasks.
   3. Accountability and results
      At the end of the day, our customers must justify the cost of using our product, and we have to be able to provide measurable results that show our product being beneficial, if not invaluable – everything we do should be mapped to a promise to make our customers’ companies better.
6. Improve cross-module integration
   One of the core benefits of the SuccessFactors platform is the ability for different modules to work together to deliver more value to the user. This is an inherent advantage that SuccessFactors has over products in silos or standalone products that may have been sewn together as a result of an acquisition.
7. Showcase user-centric innovations
   Ideas, needs, and solutions from user research are brought to the forefront in the SuccessFactors UI, while applying our deep design experience and knowledge of usability principles.
8. Kaizen!
   To keep delivering value to our customers, stay ahead of their needs, and maintain our edge on our competitors, we must constantly improve our product. We must evaluate it from every angle, identify and address its weaknesses, and constantly work to improve the product by working towards these design goals.

From the three pillars to these eight design guidelines, our GUI has one purpose – to unlock the potential gold mine of actionable, people-related data that resides within our fully integrated talent and performance management suite. As we have stated, the more people use our software, the more value is added to the transaction system, but there is another layer of value to be extracted from the richness of the data, not just the quantity. When businesses invest in multiple modules, Goal Management, Career Planning, Recruiting, Compensation, Performance Management, incredibly rich data is gathered that can help businesses make very strategic people decisions quickly and objectively. Our GUI is designed to help our users easily tap into that rich data to help them make the right decisions to drive people performance.

No one can afford to be blind sighted when it comes to their people. Now more than ever, with so much need for restructuring and resizing, this is critical. Our approach to designing the SuccessFactors Suite simply has to be different from “design for super users,” those who use the same tools day in and day out. It doesn’t matter much though if it’s hard to use, if users spend all their time figuring it out.

I decided to ask one of our User Interface leaders how we actually make it so easy and rewarding for people to use SuccessFactors. User Experience Manager Andrew Wong was pleased to share this with us. There are three pillars to the SuccessFactors approach to design:

1. User Involvement – Over the years, SuccessFactors has conducted volumes of research, including usability testing, focus groups, site visits, customer interviews, surveys, and usage data analysis. We talk to companies of all sizes, customers and non-customers alike. We also talk with end users — the managers and employees who use our product — not only HR professionals, whose challenges are often different than the everyday challenges that our end users face. You can often find us performing usability testing at trade shows and at our annual SuccessConnect user conference.
2. Innovation – We value the creative process and innovation, and we believe that innovation is what significantly differentiates SuccessFactors from products that stick to a more conventional approach. We constantly challenge ourselves to solve problems better than how they’ve been solved before, and we do not settle for “me-too.” Our NEXTlabs™ is a testament to our commitment to innovation. “New” and “exciting” are never words we avoid in our thinking. We lead with ideas, and we embrace change.
3. Corporate values – Another way we differentiate ourselves is by designing in a manner consistent with our founding principles: measurable customer success and delight, superior excellence, and constant improvement (Kaizen!). We also align our goals throughout the company and enforce our Rules of Engagement (including our “no jerks” rule) to ensure that we are all working well together, with nothing but our customers’ best interests at heart.

Our latest product, Stack Ranker, features many user-friendly design elements – it is visually appealing, easy to use, provides all the relevant information a manager requires at a glance, and strives for simplicity (see the screenshot). The Stack Rank appears clearly and cleanly on the right-hand side of screen. Easy-to-understand results will drive usage.

Our design pillars form the foundation of our truly User-Centered Design approach to building fun and easy to use software. Next week Andrew will share with us the 8 principles that drive our success in user interface design. We want our customers to get the most value out of their investment – creating a great user experience helps us to ensure that the system is used so customers will have a rich source of data from which to make their most important people-related decisions.

One question we often get is exactly how much improvement can I expect from talent and performance management systems. SuccessFactors Research engaged with Gen-Probe over a year ago to develop a case to show them how they could drive improvement in their organization through people. After successfully implementing SuccessFactors, the results have been very impressive.

• 10% Increase in the retention of high performers
• 37% Decrease in the retention of low performers
• 20% Increase in the employees who felt they had a good understanding of how their pay is determined
• 19% Increase in employees who understand the measure used to evaluate performance

Furthermore, Gen-Probe was able to reform their compensation process. High performers could now earn 150% of their bonus awards, while low performers were limited to less than 100%. In fact the visibility and transparency built into the system allowed Gen-Probe to look at the total distribution of merit and bonus pay, as well provide immediate insight into performance appraisals.

How did Gen-Probe drive change in their organization? Then recently answered this question in an article about the success of their performance management system:

“The new performance management system focused on four critical elements. The first was to provide support for defining and aligning individual goals with Gen-Probe corporate goals. The second was to provide frequent opportunities for feedback to maintain focus on achieving the already-established goals. The action plan also focused on a rewards system that tied achievement of individual and corporate goals to the allocation of merit and bonus awards. Lastly, the plan focused on strengthening the foundational skills for all employees and managers to effectively communicate goals, performance expectations and address issues before they become hurdles to achieving results.”

Can you afford to let your competitors gain that kind of advantage? Particularly now, with the economy slowing and companies renewing a focus on cost and performance, talent and performance management is critical to driving success. Companies who cede this advantage will emerge from the slow economy weaker and less competitive. Gen-Probe has proved that when companies take human capital management seriously, they win.